-------- Forwarded Message --------
Subject: Reliance Ind:Q1 Result Largely Abv Estimates, 1150 Only Abv
1070, Otherwise 920 Blw 1015 (Result Might Be Already Discounted)
Date: Mon, 27 Jul 2015 07:05:42 +0530
From: Asis Ghosh <asis...@gmail.com>
Reply-To: asis...@gmail.com
To: undisclosed-recipients:;
Time & price action suggests that RIL (CMP: 1025) has to sustain over
1030 for an immediate target of 1045-1055-1070. Only consecutive closing
above 1070, it may target 1100-1115 & 1132-1150 in the near term. In the
long term, only sustaining above 1150, RIL may scale up to 1450-1650
(FY:17-18) under the bullish case scenario.
On the downside, immediate support is around 1015 zone and below that
RIL may fall to 1002-990-983 immediately. Consecutive closing below 983,
it could further fall to 964-948-939-920-910-894 zone in the near term.
Sustaining below 894, RIL may be further crashed to 859-847 zone in the
worst bear case scenario,
Bottom Line: Technical Trading Levels (Positional)
SL</>5 FROM SLR
RIL CMP 1025
T1 T2 T3 T4 T5 T6 T7 SLR
Strong > 1030 1045 1055 1070* 1100 1115 1132 1150
<1015
Weak < 1015 1002 990-983* 964 948-939
920-910 894* 859-847 >568
Q1 result published on Friday evening is largely in line/above market
expectations. But going by the time & price action for the last few days
for the scrip, technically, the result might be already discounted &
some long positions could unwind in the short term. Although on Y-O-Y
basis, quarterly profit grow by around 12%, on a Q-O-Q basis, EPS
declined by around 3% (against around 22% growth in previous QTR).
In any way, the 12% Q1 growth is supported by its superb GRM of $10.4 (6
months high) against $8.7 & $9.3 a year and a quarter ago. Although the
revenue fall sharply this QTR amid slump in energy/crude prices, it
seems that RIL's massive investments in its petrochem business is
showing result in terms of margin (integrated hydrocarbon chain) & high
operating rates amid substantial increase in transportation fuel demand.
Looking forward, RIL is confident of maintaining sequential growth in
EBITDA in its core operations (Petrochem and E&P) by leveraging the
strength of its integrated value chain.
The company will formally launch R-JIO-4G most probably on 28-th
Dec'2015 (birth day of Dhirubhai Ambani) and the beta testing of the
same will start shortly.
Reliance retail is also showing healthy growth and is contributing in
the bottom line of the company.
But the main theme of RIL is now playing around its telecom operations,
which might be far ahead of the reality as far as the scrip is
concerned. At Q1, RIL has consolidated debt of around Rs.1.35 lakh cr
against cash & cash equivalents of around Rs.0.82 lakh cr, a significant
portion of which (debt) belongs to R-JIO. RIL is planning to raise more
debt to fund R-JIO apart from its internal accrual. RIL's deep pocket
may also see some consolidation in telecom space, where only strong
player could survive.
Clearly, the telecom operations will stretch the balance sheet of RIL in
the near term, while we could see visible result from R-JIO only after
FY:17-18. Again, India fast becoming the world's largest growing smart
phone market with massive scope in data service & "Digital India" theme,
R-JIO's 4G may be the game changer in the telecom space by next few
years. But headwinds may come from single digit ROE of telecom space and
4G voice calling technology on LTE along with availability of smart,
affordable & compatible 4G devices for the masses.
Shale gas business of the company is also facing various challenges and
we may see more shale asset sale by RIL in the coming days, which will
be positive for the scrip.
Overall, RIL may be within a broad range of 920-1150 in the near term,
until more clarity & real result will come for R-JIO.
As par BG metrics, current median valuation of RIL might be around 1100
and its projected fair valuation may be around 1160-1260-1360 under the
present market parameters (FY:16-18).
SCRIP EPS(TTM) BV(Act) P/E(AVG) LONG TERM SHORT TERM MEDIAN
VALUE 200-DEMA 10-DEMA
RELIANCE 72.79 614.91 17.02 1072.87 1126.37 1099.62
929.1 1024.07
RELIANCE 81.03 842 17.02 1131.97 1188.41 1160.19
929.1 1024.07
RELIANCE 95.6 1135 17.02 1229.53 1290.84 1260.19
929.1 1024.07
RELIANCE 110.5 1532 17.02 1321.88 1387.80 1354.84
929.1 1024.07
<http://2.bp.blogspot.com/-qmkcbMERYuk/VbUlQ9_hPvI/AAAAAAAADhE/hy3sE48XUis/s1600/RIL-24-07-2015.png>
<http://4.bp.blogspot.com/-lwTj18ucpBs/VbUlStDmVFI/AAAAAAAADhM/rEBxUK4Bh34/s1600/RIL-FIBB-24-07-2015.png>
<http://4.bp.blogspot.com/-yYu956oYJPE/VbUlV3F4zkI/AAAAAAAADhU/c8HjyMpY_u0/s1600/RIL-WK-24-07-2015.png>
<http://4.bp.blogspot.com/-RbtiWs5Djck/VbUlYHAUL3I/AAAAAAAADhc/-nanP-YGOEk/s1600/RIL-PATTERN-24-07-2015.png>
<http://1.bp.blogspot.com/-bw9mS1RHI5o/VbUladpKR5I/AAAAAAAADhk/kZ1BNVkSYk4/s1600/RIL-PATTERN-RSI-24-07-2015%255D.png>
<http://3.bp.blogspot.com/-mFbwKdWZzvs/VbUlcnznVuI/AAAAAAAADhs/u6StAsfAE-s/s1600/RIL-TL-24-07-2015.png>
--
Thanks & Regards,
Asis Ghosh
(asisghosh.blogspot.com)
NCFM-TA Certified
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